Rio Tinto Ltd. is selling a nickel- and copper-mining project in the U.S. for around US$325 million in cash, the first in a string of disposals new Chief Executive Sam Walsh plans in an effort to bolster the Anglo-Australian company’s balance sheet.

Rio Tinto said Thursday it had reached a binding agreement with Toronto-based Lundin Mining Corp. to sell its Eagle project in Michigan’s Upper Peninsula. Construction at the site began three years ago and is about 55% complete.

We valued Eagle at $740 million, but this is based on Citi’s nickel price forecasts (>$8/lb in 2013, >$9/lb in 2014, >$10/lb in 2015 and $9/lb LT) that are significantly higher than current nickel prices of around $6.5/lb. At spot nickel prices our NPV of Eagle would be around $390 million…

…In isolation this is not enough to move the needle, but if the sale of IOC (NPV $3.6 billion) and Northparkes ($770 million) can be executed, and potentially coal as well, then it raises the potential for capital management in early 2014.

Previous concerns over iron ore prices now look excessive meaning mid term earnings risk is overstated; we estimate RIO shares factor $93-100/t in 2015 yet 18% of the cost curve is above $100/t until mid 2015. Trading at 0.59xP/NPV (BHP is on 0.77x), we believe RIO offers compelling value; we believe a re-rating to 0.88x, its 15 year average, is justifiable as capex recedes from mid 2015, which would imply 49% LT upside potential to the shares.

Other base-metal miners have strengthened today as well. BHP Billiton (BHP) has climbed 1.7% to $63.02, Vale (VALE) has jumped 4.3% to $14.30 and Cliffs Natural Resources (CLF) has popped 5.4% to $18.30.

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. The Barrons.com Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools.